The short answer
UK employers can put more money in their team's pockets at little or no cost through pension salary sacrifice, the Cycle to Work scheme and interest-free season ticket loans - plus by telling employees about the reliefs they can claim themselves from HMRC.
At a glance
| What | What your team gets | Cost to you | Effort to set up |
|---|---|---|---|
| Cycle to Work | A new bike and equipment paid from gross pay | Nothing; saves employer National Insurance | Low, with a scheme provider |
| Pension salary sacrifice | Full tax and National Insurance relief on contributions | Nothing; saves employer National Insurance | Low, with a pension provider |
| Season ticket loans | An interest-free loan for an annual travel pass | The cash flow of the loan only | Very low |
| Reliefs your team claims themselves | Money back on job expenses, working from home and more | Nothing - just tell them | Very low |
1. Cycle to Work
Your business provides a bike and safety equipment, and your employee pays for it from gross salary - saving income tax and National Insurance. Your business saves employer National Insurance on the salary given up too.
- Most employers use a scheme provider, which handles the paperwork, consumer-hire authorisation and the upfront purchase - so there's no cash-flow hit for you.
- The arrangement must not take anyone's pay below the National Minimum Wage.
- It's a Live Well win as well as a money one: more movement, every working day.
2. Pension salary sacrifice
The employee exchanges part of their gross salary for an employer pension contribution. Because the salary is given up before tax and National Insurance, the employee saves both - and your business saves employer National Insurance on the same amount. Some employers pass that saving into the employee's pension as an extra top-up.
- You don't have to contribute anything extra yourself.
- It must be a genuine contractual change, agreed with each employee, and must not take cash pay below the National Minimum Wage.
- Ask your pension provider to set it up; most will do so at no charge to the business.
3. Season ticket loans
An annual rail, tram or bus pass is far cheaper than daily tickets, but the upfront cost puts it out of reach for many people. An interest-free season ticket loan fixes that: you advance the cost, and the employee repays it monthly through payroll.
- As long as the total of all employer loans to an employee stays under £10,000, there is no taxable benefit and nothing to report.
- Your only cost is the cash flow of the loan itself.
- A simple written agreement covering repayment - including what happens if someone leaves - is all you need.
4. Money your team can claim themselves
These need nothing from your payroll. Telling your team about them is a genuine benefit in itself.
| Relief | What it gives back | How to claim |
|---|---|---|
| Flat-rate job expenses | A fixed annual deduction for tools, uniforms and work clothing in many roles | GOV.UK, usually in minutes |
| Working from home relief | A weekly allowance towards household costs for eligible homeworkers | GOV.UK |
| Marriage Allowance | Transfers £1,260 of personal allowance between spouses or civil partners where one earns under the allowance | GOV.UK |
| Professional subscriptions | Tax relief on fees to approved professional bodies | GOV.UK or Self Assessment |
| Mileage allowance relief | Relief where an employer reimburses business mileage below the approved rate | GOV.UK or Self Assessment |
One honest difference from Ireland: the UK has no personal tax relief for everyday medical costs. For employees with a cash plan or health insurance, though, organised receipts are what turn eligible costs into successful claims - and they matter for household budgeting either way.
What you can't do
Since April 2017, most salary sacrifice arrangements no longer save tax or National Insurance: the benefit is taxed on the higher of the salary given up or the benefit's value. The exceptions that keep their full advantage are pension contributions, Cycle to Work, ultra-low emission cars and workplace nurseries. Treat any provider promising tax-free gift cards, gym memberships or health plans with caution.
How ViscaCare helps
ViscaCare is a digital health centre for your people and their families: Ask Mia to guide them, their health records and insights in one place, and Visca Points that reward living well. When life throws a speed bump, We've Got You - counselling, a Doctor seven days a week and trusted care partners.
It also helps members stay on top of their money:
- Organised health spending. Members' records gather the health costs they've paid into a year-end summary - ready to support eligible cash-plan or insurance claims, and a clear picture of household spending either way.
- One home for the whole household. ViscaCare covers the family, so everyone's costs and records sit in one place.
Your 30-minute checklist
- Register with a Cycle to Work scheme provider
- Ask your pension provider about salary sacrifice through payroll
- Write a one-page season ticket loan policy and tell your team
- Share this guide, with a reminder to check their flat-rate expenses and Marriage Allowance
- Talk to ViscaCare about giving your team a digital health centre for their whole family
So every business can say We've Got You.
A note on accuracy
This guide is general information based on HMRC rules as at October 2026. It is not tax or financial advice. Tax and National Insurance rules change, so check GOV.UK or your adviser for the latest position.
Common questions
What salary sacrifice schemes still work in the UK?
Since 2017, only a few salary sacrifice arrangements keep their full tax and National Insurance advantage: pension contributions, Cycle to Work, ultra-low emission cars and workplace nurseries. Most other benefits swapped for salary are taxed as normal pay.
How does pension salary sacrifice save money for employer and employee?
The employee gives up gross salary in exchange for an employer pension contribution, so neither side pays National Insurance on that amount. The employer can pass some or all of its National Insurance saving into the employee’s pension.
Are season ticket loans taxable in the UK?
An interest-free season ticket loan is not a taxable benefit as long as the total of all employer loans to that employee stays under £10,000. Above that, the interest foregone becomes taxable and must be reported.
Can UK employees claim tax relief on medical expenses?
No - unlike Ireland, the UK has no personal tax relief for everyday medical costs. Employees with a cash plan or health insurance can claim back eligible costs from their provider, so keeping organised receipts still matters.
What tax reliefs can UK employees claim themselves?
Common ones include flat-rate job expenses for certain roles, working-from-home relief where eligible, the Marriage Allowance, tax relief on professional subscriptions, and mileage allowance relief - all claimed through GOV.UK or a Self Assessment return.
Sources
- GOV.UK - Salary sacrifice for employers
- Department for Transport - Cycle to Work scheme guidance
- GOV.UK - Expenses and benefits: loans provided to employees
- GOV.UK - Claim tax relief for your job expenses
Employment, tax and healthcare rules change. We review these pages regularly, but always confirm details with the official source or your own adviser before relying on them. This page is general information for employers - it is not legal, tax or medical advice.
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